A true virtual server is very different from the typical virtual web server. Virtual web servers use software to respond to requests on multiple domains. A virtual server does not rely on specific software but instead it virtualizes the entire operating system.
A single physical computer will still have one processor set, one set of hard drives, one motherboard and memory system, but that single hardware stack will support multiple operating systems simultaneously. Using advanced programming and a highly specialized version of the FreeBSD operating system, developers in the web hosting industry have packaged the operating system into a distinct unit. The virtual operating system runs under a master operating system, and the master can operate multiple virtual operating systems simultaneously. The result is a shared server running a dedicated operating system; each user on the system receives their own operating system and, optionally, unlimited access to virtually every facet of the system.
Essentially, a virtual server takes the concept of FTP "root jails" and extends it across an entire system. Typically, when you sign into an FTP server, you only see your folders and the top, or root, folder is the base of your personal area. However, if you were to look at the operating system, you would find that what you perceive as the root folder is not truly the root of the entire system. The system places your account in a "root jail" and does not allow you to go any higher. A virtual server places every aspect of the server into a "root jail," and for that reason the technology is sometimes called "FreeBSD jail hosting."
There are essentially two generations of virtual servers. Many leading web hosting providers refer to their virtual server as a virtual private server. These servers focus on providing each user with their own private operating system but often lack the full capabilities of even a standard virtual web server. Our development team identified missing functionality and odd limitations with the virtual private servers early in their introduction. Since that time, we have worked to develop a virtual dedicated server that combines a dedicated operating system with sophisticated web hosting tools.